This book deals with two issues. The first concerns the various measurement of fiscal decentralization in general and their usefulness for policy analysis. The second and more specific issue concerns the taxonomy of intergovernmental grants and the limits of the current classifications.

The challenge for fiscal policy in Slovakia is to achieve fiscal consolidation in a way which supports
the fragile recovery and protects spending on areas which are important for re-embarking on a trajectory of
high trend growth and underpinning a catch-up in living standards.

In several OECD countries, ongoing fiscal consolidation might have a negative impact on the static income distribution. However, this conclusion should be treated only as an approximate first step in the analysis.

Public and private debt levels are very high by historical standards. OECD-wide total financial liabilities now exceed 1 000% of GDP. High debt levels can create vulnerabilities, which amplify and transmit macroeconomic and asset price shocks.

Indonesia has come a long way in improving its tax system over the last decade, both in terms of revenues raised and administrative efficiency. Nonetheless, the tax take is still low, given the need for more spending on infrastructure and social protection.

The economics profession seems to increasingly endorse the existence of a strongly negative nonlinear effect of public debt on economic growth. Reinhart and Rogoff (2010) were the first to point out that a public debt to GDP ratio higher than 90% of GDP is associated with considerably lower economic performance in advanced and emerging economies alike.

In many OECD countries debt has soared to levels threatening fiscal sustainability, necessitating its reduction over the medium to longer term. This paper uses stylised simulations in a small, calibrated macroeconomic model which features endogenous interactions between fiscal policy, growth and financial markets.